Prediction-market firms and gambling groups raise Washington spending

Kalshi spent $990,000 on direct lobbying in the first half of 2026, nearly matching its full-year 2025 total of $1 million, federal lobbying disclosures released this week show. Including outside lobbying firms, the U.S. prediction-market operator’s federal spending reached nearly $1.8 million, as scrutiny of event-contract platforms intensifies in Congress and at the Commodity Futures Trading Commission.

The casino and gaming industry is increasing its own presence in Washington. The American Gaming Association spent $1.39 million on lobbying so far in 2026, according to the filings, and nearly $1.8 million when outside firms are included, 30% more than in the first half of 2025. Cherokee Nation, which has casino and other gaming interests, spent $600,000 in the first half, putting it ahead of last year’s pace.

Polymarket, Kalshi’s main rival, has a smaller lobbying operation. A firm representing Polymarket spent $180,000 on its behalf in the first six months of 2026, a pace that would match the $360,000 spent in 2025. Polymarket uses one lobbying firm, while Kalshi uses seven, including its in-house operation.

Sports contracts sit at the center of the fight

Prediction markets allow users to trade contracts tied to the outcome of future events. The platforms argue that sports-related event contracts are swaps, comparable in regulatory treatment to financial contracts linked to commodities such as gold or corn, and should remain under CFTC oversight. Critics say sports contracts resemble sports wagering, an activity generally overseen by state regulators.

Lawmakers have introduced several bills this year aimed at insider trading on prediction markets and at limiting event contracts tied to sports, elections and acts of war. Sports contracts are the largest category on the platforms, according to CNBC.

The sector has faced political controversy after trades placed before U.S. military actions in Venezuela and Iran raised concerns about the possible use of inside information. The Wall Street Journal also reported last week on betting that may have relied on inside political information. Separately, a teleprompter operator for President Donald Trump was suspended after it was disclosed he was under investigation for using material, nonpublic information to trade on Kalshi.

Kalshi and Polymarket have said they have taken steps to detect and prevent insider trading on their platforms. House Oversight and Reform Committee Chairman James Comer, a Kentucky Republican, has opened an investigation into the issue.

Congress remains cautious

Kalshi has added former Biden and Obama administration officials to its government relations effort and counts Donald Trump Jr. as a paid adviser. Chief Executive Tarek Mansour recently appeared at the Capitol with Democratic Rep. Josh Gottheimer of New Jersey in support of legislation focused on protecting children from online gambling.

Patrick McHenry, a former Republican congressman and senior adviser to the Coalition for Prediction Markets, said the industry is competing with a casino sector that has spent years building relationships with federal and state officials. The coalition represents five companies, including Kalshi. Kalshi declined to comment and referred questions to McHenry.

At a House Agriculture Committee subpanel hearing Tuesday, Republican Rep. Dusty Johnson of South Dakota said many Americans see sports event contracts as similar to sports betting, while others view them as financial products that can collect information about future events. Johnson also said the CFTC is not a gambling regulator.

Legislation specific to prediction markets is viewed as unlikely this year as Congress approaches the November elections, though companies are watching for the possibility that narrower provisions could be added to a broader bill before year-end. TD Cowen policy analyst Jaret Seiberg said attention remains on the CFTC, which released a proposed rule for prediction markets in June and is taking public comments.

A person familiar with the House Oversight Committee investigation said Kalshi’s recent briefing was well received, while Polymarket drew more scrutiny after sending outside counsel rather than company representatives. A Polymarket spokesperson said the decision reflected a misunderstanding and said the company remains committed to collaboration and transparency with the committee.

This story draws on original reporting from CNBC.